By Kim Hyun-cheol
Staff Reporter
South Korea, France and a joint team from the United States and Japan are heading for last-minute competition as the short-listed consortia bid to build the first pair of nuclear plants in the United Arab Emirates (U.A.E.).
The total value of the project is estimated to be nearly $40 billion, as the initial contract is likely to lead to another agreement to build a number of reactors of the same design.
They are expected to supply half the country's energy demand by 2020. The U.A.E. anticipates its electricity requirements will rise to 40 gigawatts in 2020 from 15.5 gigawatts in 2008.
The first plant will provide about 3 percent of the power supply to the market in the U.A.E. by 2020 with the start-up of about 1 gigawatt of power. By 2025, nuclear power is estimated to supply about 15 percent of the market. The Middle Eastern country is expected to build three or four reactors initially.
Led by the Korea Electric Power Corp. (KEPCO), the Korean consortium includes builders from conglomerates Samsung and Hyundai, as well as Westinghouse, a unit of Japan's Toshiba Corp. Areva SA, the industry leader, heads the French bidders while General Electric and Hitachi have teamed up with another international consortium.
The bidding campaign has even included some diplomatic intervention to try and influence the final decision. Earlier this month, Foreign Minister Yu Myung-hwan met with the U.A.E.'s Crown Prince Sheikh Mohammad bin Zayed Al Nahyan during his visit to Algeria and the U.A.E., where he promoted the competence of Korean nuclear plants.
Prime Minister Han Seung-soo also paid a visit to the Arab country in June to sign an agreement on nuclear cooperation between the two countries.
In spite of having no previous experience in building nuclear reactors overseas, Korea is emerging as a "surprise contender" in the lucrative global competition with edges in price and construction capacity.
The French group revised its own offer and proposed to build fewer reactors than planned in order to bridge the cost gap with the reportedly cheaper Korean bid, reported the Wall Street Journal.
Both U.A.E. and KEPCO officials, however, declined to comment on the bid for confidentiality reasons.
U.S. President Barack Obama approved a nuclear agreement with the U.A.E. in May, completing all domestic processes necessary for the bid.
France is strengthening its military cooperation with the country. With ongoing negotiations to upgrade U.A.E. fighters from Mirages to Rafales, President Nicolas Sarkozy visited Abu Dhabi in May to urge support for France's nuclear businesses there.
The U.A.E. was supposed to announce the winner in September, but delayed the decision to allow for additional negotiations. The final decision is likely to be made this month at the earliest, industry insiders forecast.